Md. urged not to lease BWI airport Private firms could do some work, panel says

December 22, 1992|By Suzanne Wooton | Suzanne Wooton,Staff Writer

Maryland should not allow private business to lease or manage Baltimore-Washington International Airport, but it should consider turning over work such as marketing to companies, a study commission says.

The recommendations are included in the Maryland Task Force on Privatization's 60-page report, which is expected be released today in Annapolis by Gov. William Donald Schaefer. The commission was created by the legislature to explore which government functions could be handled by businesses.

BWI was one of the most complicated and sensitive issues in the commission's three-month discussions. A joint venture, comprising Lockheed Air Terminal, a division of the giant aircraft maker, and Westinghouse Electronic Systems Group of Linthicum, has proposed leasing the airport in exchange for regular payments and profit sharing.

The deal could mean a politically attractive, accelerated lease payment of between $40 million and $50 million, according to legislative leaders who have met with the companies. Such an arrangement could become the first lease of a major publicly owned airport in the U.S., though several smaller ones are managed by companies such as Lockheed.

But the commission, headed by former Maryland Transportation Secretary William K. Hellmann, expressed concerns about the state's need to maintain fiscal control and daily oversight at BWI. It also questioned how the airport's revenues -- $53 million last year alone -- would be used and whether BWI would remain eligible for federal grants.

"The Task Force does not support the transfer of the management or operation of BWI to the private sector at this time," it said.

The task force examined privately managed airports in California New York, Massachusetts, Canada and United Kingdom, but said conditions at those facilities offered "no clear correlations to BWI."

The state has not received a formal proposal from Lockheed-Westinghouse, but the governor, legislative leaders and transportation officials have met with representatives for the joint venture.

The Lockheed-Westinghouse proposal has strong political appeal as the state struggles with a $450 million deficit and a growing list of transportation demands. Representatives for Lockheed-Westinghouse could not be reached for comment.

But Maryland Senate President Thomas V. Mike Miller, D-Prince George's, said: "I think that somebody might want to rethink the report. These are tight fiscal times for the state, and if there's a way the private sector can perform the same service and save the taxpayers money, we should do it."

While considered a prime economic development tool for the state, BWI is a money-loser. Maryland has spent some $170 million more than it has gained from BWI's operations since buying the airport from Baltimore city in 1972 for $36 million.

Mr. Schaefer, who recently expressed reservations about leasing BWI, is expected to follow the commission's recommendations. Still, he plans in January to visit the Lockheed-owned terminal at Lester B.Pearson Airport in Toronto, said his press secretary, Page Boinest.

Currently, about $2 billion in state work is performed by private contractors, including roughly half of BWI's maintenance and operation. Of the airport's 10,000 workers, fewer than 400 are state employees.

The airport generates its revenues largely from fees paid by food service and car rental companies, as well as from landing and terminal rental fees paid by airlines.

The report recommended that the Maryland Aviation Administration, which operates BWI, consider other opportunities to privatize airport operations, including fire rescue, transportation, maintenance and marketing services. Some of those activities are already heavily contracted out to private businesses.

BWI RECOMMENDATIONS

Recommendations by the Maryland Task Force on Privatization in a report scheduled to be released today.

* * The state should keep running the airport.

* The state should consider privatizing more of the following services:

* Fire rescue service

* Maintenance at BWI and Martin State Airport.

* Marketing

* Terminal and transportation services

* The Department of Transportation, the Maryland Aviation Administration and the Department of Economic and Employment Development should work with Westinghouse Electric Corp. to "showcase" Westinghouse technology at BWI.

* The MAA and the Maryland Port Administration should be run within an expanded Maryland Transportation Authority, which collects tolls at bridges and tunnels.

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